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What is Precious Metals Trading?

Precious metals trading is the process of exchanging currency for gold, silver, platinum, palladium or other available precious metals. They offer a great way to diversify an existing portfolio, start trading in the first place and hedge against inflation and economic uncertainty. They are objects of great interest and speculation in commodity markets, viewed as holding their value a lot better than many other investments.


Precious Metal Trading Explained

Since around 600 BC, gold has been used as a currency. While precious metals have a range of industrial applications, from use in engineering and electronics to chemicals, their other main use is as investments. Most investors view gold and other precious metals as holding their value much better than paper money, which is why they can appeal.

When precious metal trading is explained, it is important to be aware of the different ways they can be traded. Precious metals can be physically bought and owned with bullion, coins and bars but as an investment choice commodity ETFs, common stocks and mutual funds, futures and options are the best choice. They can be exchanged in the same way as currencies with Equiti.


What is Precious Metals Trading Affected By?

There are various factors that affect the value of precious metals. These are important to understand with precious metal trading explained for new and experienced traders:

  • Supply and demand: Shifts in precious metal mining can affect supply levels and see specific prices rise and fall.
  • Economic uncertainty: Precious metals are seen as safe havens during economic volatility due to their lasting value, so often experience a surge in demand and value.
  • Industrial output: Demand for precious metals for industrial use can grow, with new technologies developed, and see them experience a price hike.


Start Trading Precious Metals with Equiti

With precious metal trading explained and a greater understanding of the market, you can open an account with Equiti to start trading gold, silver, platinum and palladium. For those new to trading, opening a demo account to trade gold, silver, platinum and palladium risk-free can be a good way to practice first.